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Franco-Nevada (FNV) Beats on Q2 Earnings, Hikes 2021 View
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Franco-Nevada Corporation (FNV - Free Report) reported adjusted earnings of 96 cents per share in second-quarter 2021, up 100% from the prior-year period. Additionally, the bottom line surpassed the Zacks Consensus Estimate of 94 cents.
The company generated revenues of $347 million in the reported quarter, reflecting year-over-year growth of 78%. The top-line figure, however, missed the Zacks Consensus Estimate of $362 million. During the June-end quarter, 86.4% of revenues were sourced from gold and gold equivalents (56.2% gold, 13% silver, 6.3% platinum group metals and 10.9% from other mining assets).
The company sold 166,856 Gold Equivalent Ounces (GEOs) in the reported quarter, up from the prior-year quarter’s 104,330 GEOs. Higher contributions from the company’s largest streams, as well as the addition of Vale S. A’s (VALE - Free Report) Royalty Debentures and Condestable stream, were partly offset by lower production from Hemlo mine.
During the reported quarter, adjusted EBITDA climbed 83% to $290 million, year over year.
In second-quarter 2021, the average gold price was $1,816 per ounce, 6.1% higher than the year-ago period. Silver prices averaged $26.69 per ounce in the reported quarter, up 63% year on year. Platinum prices went up 49.3% year over year to $1,180 per ounce, and palladium prices increased 41.8% year on year to $2,788 per ounce.
FrancoNevada Corporation Price, Consensus and EPS Surprise
The company had $198 million cash in hand at the end of second-quarter 2021, up from the $534 million reported as of the end of 2020. It recorded an operating cash flow of $469.5 million in the first half of 2021, up from the $345.4 million witnessed in the prior-year period.
Franco-Nevada is debt free and uses its free cash flow to expand the company’s portfolio and payout dividends. It now has available capital of $1.4 billion.
Guidance
The company now expects to achieve current-year GEO sales near the higher end of its guided range of 590,000 GEOs and 615,000 GEOs, up from the prior estimate of 580,000 GEOs to 615,000 GEOs. Given higher commodity prices, Franco-Nevada now expects to generate revenues of $155-$170 million from Energy assets, up from the previous projection of $115-$135 million.
Other Updates
On Apr 16, the company acquired 57 million of Vale’s outstanding participating debentures for $538 million. Moreover, Franco-Nevada accrued 9.9% equity investment in Labrador Iron Ore Royalty Corporation. These investments are accretive to the company’s cash flow.
Price Performance
Franco-Nevada’s shares have gained 23.8% so far this year, as against the industry’s loss of 11.5%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Franco-Nevada currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 455% for 2021. The company’s shares have soared 97.9% so far this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have gained 21.8% so far this year. It currently sports a Zacks Rank #2.
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Franco-Nevada (FNV) Beats on Q2 Earnings, Hikes 2021 View
Franco-Nevada Corporation (FNV - Free Report) reported adjusted earnings of 96 cents per share in second-quarter 2021, up 100% from the prior-year period. Additionally, the bottom line surpassed the Zacks Consensus Estimate of 94 cents.
The company generated revenues of $347 million in the reported quarter, reflecting year-over-year growth of 78%. The top-line figure, however, missed the Zacks Consensus Estimate of $362 million. During the June-end quarter, 86.4% of revenues were sourced from gold and gold equivalents (56.2% gold, 13% silver, 6.3% platinum group metals and 10.9% from other mining assets).
The company sold 166,856 Gold Equivalent Ounces (GEOs) in the reported quarter, up from the prior-year quarter’s 104,330 GEOs. Higher contributions from the company’s largest streams, as well as the addition of Vale S. A’s (VALE - Free Report) Royalty Debentures and Condestable stream, were partly offset by lower production from Hemlo mine.
During the reported quarter, adjusted EBITDA climbed 83% to $290 million, year over year.
In second-quarter 2021, the average gold price was $1,816 per ounce, 6.1% higher than the year-ago period. Silver prices averaged $26.69 per ounce in the reported quarter, up 63% year on year. Platinum prices went up 49.3% year over year to $1,180 per ounce, and palladium prices increased 41.8% year on year to $2,788 per ounce.
FrancoNevada Corporation Price, Consensus and EPS Surprise
FrancoNevada Corporation price-consensus-eps-surprise-chart | FrancoNevada Corporation Quote
Financial Position
The company had $198 million cash in hand at the end of second-quarter 2021, up from the $534 million reported as of the end of 2020. It recorded an operating cash flow of $469.5 million in the first half of 2021, up from the $345.4 million witnessed in the prior-year period.
Franco-Nevada is debt free and uses its free cash flow to expand the company’s portfolio and payout dividends. It now has available capital of $1.4 billion.
Guidance
The company now expects to achieve current-year GEO sales near the higher end of its guided range of 590,000 GEOs and 615,000 GEOs, up from the prior estimate of 580,000 GEOs to 615,000 GEOs. Given higher commodity prices, Franco-Nevada now expects to generate revenues of $155-$170 million from Energy assets, up from the previous projection of $115-$135 million.
Other Updates
On Apr 16, the company acquired 57 million of Vale’s outstanding participating debentures for $538 million. Moreover, Franco-Nevada accrued 9.9% equity investment in Labrador Iron Ore Royalty Corporation. These investments are accretive to the company’s cash flow.
Price Performance
Franco-Nevada’s shares have gained 23.8% so far this year, as against the industry’s loss of 11.5%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Franco-Nevada currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 455% for 2021. The company’s shares have soared 97.9% so far this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have gained 21.8% so far this year. It currently sports a Zacks Rank #2.